Correlation Between Daiwa House and Sino Land
Can any of the company-specific risk be diversified away by investing in both Daiwa House and Sino Land at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Daiwa House and Sino Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daiwa House Industry and Sino Land Co, you can compare the effects of market volatilities on Daiwa House and Sino Land and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Daiwa House with a short position of Sino Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiwa House and Sino Land.
Diversification Opportunities for Daiwa House and Sino Land
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Daiwa and Sino is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Daiwa House Industry and Sino Land Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Land and Daiwa House is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Daiwa House Industry are associated (or correlated) with Sino Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Land has no effect on the direction of Daiwa House i.e., Daiwa House and Sino Land go up and down completely randomly.
Pair Corralation between Daiwa House and Sino Land
Assuming the 90 days horizon Daiwa House Industry is expected to generate 0.43 times more return on investment than Sino Land. However, Daiwa House Industry is 2.32 times less risky than Sino Land. It trades about 0.06 of its potential returns per unit of risk. Sino Land Co is currently generating about 0.0 per unit of risk. If you would invest 2,275 in Daiwa House Industry on November 2, 2024 and sell it today you would earn a total of 867.00 from holding Daiwa House Industry or generate 38.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.75% |
| Values | Daily Returns |
Daiwa House Industry vs. Sino Land Co
Performance |
| Timeline |
| Daiwa House Industry |
| Sino Land |
Daiwa House and Sino Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daiwa House and Sino Land
The main advantage of trading using opposite Daiwa House and Sino Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiwa House position performs unexpectedly, Sino Land can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sino Land will offset losses from the drop in Sino Land's long position.| Daiwa House vs. Sino Land Co | Daiwa House vs. Sun Hung Kai | Daiwa House vs. Holiday Island Holdings | Daiwa House vs. China Overseas Land |
| Sino Land vs. Wharf Holdings | Sino Land vs. Hong Kong Land | Sino Land vs. Sun Hung Kai | Sino Land vs. International Land Alliance |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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